As consumers hunker down in their homes, sales from tourism and business travel have all but evaporated. Consumers are changing their shopping behavior, avoiding certain categories like vape - which could negatively impact lung functionality - and purchasing more edibles instead; adding to the importance of product branding and retail synergy for cannabis as many people are shopping online. Identifying and directly targeting loyal customer cohorts and stocking their preferred products is not just best practice in the time of COVID-19, but is now a key survival strategy. A customer cohort analysis shows that while average order value has increased post-sheltering, consumers are going longer between shopping trips, making it even more critical for retailers to target loyal customers and stock their preferred products to encourage repeat business. These loyal customers were identified as having purchased at least two times per month between January and February of 2020.
Improved Brand Recognition & Effective Customer Targeting
Defining an ideal customer is the first step to any successful brand strategy. Brands and retailers willing to share sales data with each other can use it to identify their target customer base (or current customer majority) and then collaborate on how best to reach that base. Effective targeting paves the way for a more personal customer experience that will help brands stand out in a crowded marketplace.
When you know who and where to target, advertising with effective cannabis product branding becomes more effective. Making media buying decisions based on target demographic and location data removes the guesswork in ad placement and improves campaign efficiency. Retailers and brands can effectively spend their ad dollars on billboards, websites, and other media sources that they know their target customer is most likely to see because those placement decisions were based on real data.
Improved Cannabis Retail Synergy
Consider two large retailers who take very different approaches to building their brands and how they relate to cannabis product branding: Macy's and REI. Macy's tries to reach everyone by stocking lots of different brands that appeal to a wide target demographic. Casting a wide net may bring in a high volume of customers, but those customers are not necessarily loyal to the Macy's brand and may only shop there if a significant discount or coupon is available. As a result, Macy's doesn't stand out in the mind of consumers as the leader in any particular category. REI, on the other hand, has built its brand identity around a specific target demographic - outdoor people - and only stocks brands related to outdoor activity, this intentional product branding is beneficial. REI is not going to stock Gucci because that brand doesnâ't align with their target customer. Outdoor people trust that REI will have knowledgeable staff and the best selection of outdoor gear, creating a loyal customer base. This consistency and brand relevancy creates retail synergy - the sum of REI stores has become greater than its parts - defining the brand as the leader in outdoor.
So, how do cannabis retailers achieve this level of retail synergy? Retail identity can be discovered by studying consumer brand trends specific to retail locations. When cannabis brand and product branding trends are compared with location demographics, targeted (or current majority) customer types emerge.
Retailers can achieve a true identity by sourcing products from brands that share the same customer types. Taking it a step further, retailers can improve efficiency by only dealing with products and brands that share the same customer types, making them more appealing to their target customers. This strategy will eventually lead to improved retail synergy and a loyal customer base.
As consumer cannabis tastes, product branding and product preferences mature along with the market, retailers and brands that prioritized data sharing and collaboration will emerge as regional leaders when the dust settles. An advanced analytics tool like AskTreez makes it easier than ever to gain actionable insights based on real-time customer and location data. Partners that are both on Treez can easily share reports and insights through the dashboard, removing touchpoints and improving communication. If you're working with a partner that is not on Treez, reports can be exported and shared with any and all supply chain partners.
Are you looking to take the necessary steps to solidify cannabis product branding and improve retail synergy? If you're already on Treez, ask your Customer Success Manager for details on getting set up with AskTreez.